A California jury in Superior Court of the State of California, County of Los Angeles, has ruled against an avionics technician, who filed a $6 million whistleblower claim against SpaceX – Elon Musk’s rocket startup company. Blasdell v. Space Exploration Technologies Corp., et al., No. BC615112.

Plaintiff Jason Blasdell alleged that his employment with SpaceX was terminated after he informed company officials, including Elon Musk, that SpaceX technicians were instructed to cut corners, and sign off on improper testing, in order to produce rocket ships more quickly and cheaply. According to Blasdell, these alleged corner-cutting and improper testing constituted fraud against consumers of aircraft and space craft parts, a violation of 18 U.S.C. § 38.

The court permitted the case to go to trial, but refused to let Blasdell testify regarding some of his allegations because Blasdell did not have substantial knowledge (or other basis to testify) of the actions and testing of other technicians. Although Blasdell told the jury he was a dedicated employee who received strong performance reviews, and was terminated only after whistleblowing on fraudulent practices, other witnesses testified Blasdell was a paranoid, disruptive, and unproductive employee who did not engage in any alleged whistleblowing until after he was fired. Significantly, Blasdell’s own expert testified that Blasdell suffered from paranoia. Further, SpaceX produced significant evidence demonstrating that Blasdell was terminated for performance reasons. The 12-person jury deliberated for a few hours before returning a 9-3 verdict in favor of SpaceX.

Whistleblower and retaliation claims present unique challenges to employers. Some steps employers can take to limit such claims include:

  1. Implementing clear policies prohibiting unlawful retaliation.
  2. Providing training that helps supervisors understand what sort of conduct constitutes retaliation.
  3. Encourage supervisors to engage with subordinates who raise complaints to work with those subordinates to determine whether there is merit/substance to the complaint, and to follow up with those subordinates to ensure that there have been no further incidents.
  4. When appropriate, restructuring the work environment so a subordinate is no longer reporting to a supervisor he or she complained about, as this may reduce the odds of supervisor retaliation against that subordinate.
  5. Carefully reviewing subsequent employment actions to ensure all decisions regarding a complaining subordinate are well-documented, well-supported, and appear to be reasonable and consistent with the employer’s policies and practices.